We use cookies to customise content for your subscription and for analytics.If you continue to browse Lexology, we will assume that you are happy to receive all our cookies. For further information please read our Cookie Policy.

The CTMO applies Article 15.2 of the new Trademark Law in an opposition case filed before the entry into force of the law

The China Trademark Office upheld the opposition against the trademark application filed by a company affiliated to the distributor of the Opponent, by citing Article 15.2 of the new Trademark Law.

Legal and Regulatory Background

Article 15.2 of the New “Trademark Law” provides that “Where a trademark applied for registration is identical with or similar to another person’s prior used but yet unregistered trademark, in respect of same or similar goods, and the applicant has contractual or business contacts, or other relations other than those prescribed by the preceding paragraph, with the prior trademark user so that the applicant definitely knows the existence of this person’s trademark, if this person files an opposition, the applied trademark shall not be registered.”

Article 1.1 of the “Circular of the State Administration for Industry & Commerce on Matters Concerning Application of the Amended Trademark Law of the People’s Republic of China” deals with the application of the new law to pending cases and provides that “The New Trademark Law applies to any administrative decision made by the China Trademark Office (CTMO) after May 1, 2014 (inclusive of the date, hereinafter the same) regarding the application for the registration of trademark, application for trademark opposition, application for trademark alteration, application for trademark assignment, application for renewal of trademark registration, application for trademark revocation, application for trademark cancellation, application for recordal of trademark license and etc filed with CTMO before May 1, 2014. The former Trademark Law applies when the CTMO reviews the qualification and opposition grounds of the opponent in the trademark opposition procedure.”

The term "opposition grounds" used in the last sentence is problematic. It does not correspond to the wording used in Article 2.2 of the Circular concerning cases adjudicated by the TRAB, where a distinction is made between the subject qualification of the interested party in the opposition procedure" (subject to the Former Law), and the "other procedural matters and substantial matters" (subject to the New Law).

This case clarifies the ambiguity and in addition, provides an interesting view on what sort of evidence is necessary when an opposition is based on article 15 of the Law.

Our client filed an opposition on June 25, 2013. The main grounds of the opposition were as follows:

The opposed party is affiliated to a food company in Guangzhou, which is the

distributor of the opponent. The registration of the opposed trademark violates the provisions of Article 15 of the Old Trademark Law (2001 version).

The opposed party preemptively filed the opponent’s trademark, which has been prior used by the opponent and has certain influence. The opposed trademark should not be approved for registration according to Article 31 of the Old Trademark Law (2001 version).

The registration of the opposed trademark may cause detrimental social influence, and the registration of the opposed trademark should not be approved in accordance with Article 10.1.8 of the Old Trademark Law (2001 version).

These grounds were, obviously, based on the Former Trademark Law, since at the time of the opposition, the New Law was not yet promulgated.

The evidence submitted by the opponent included:

Business license of the wine company and the food company in Guangzhou;

Basic information on the wine company and the food company published on the website of Guangzhou AIC;

Business card of the legal representative of the wine company;

POA issued by the opponent to the food company in Guangzhou and the international sales contracts signed between the opponent and the food company;

Overseas remittance application form filed by the food company in Guangzhou to settle payments to the opponent;

Account receivable of the opponent from the food company verified by an accounting firm and the accounting firm’s affidavits;

Email correspondence between the employee of the opponent and the legal representative of the opposed party; and

Sales evidence and brochures of the opponent’s products in China.

The opposed party did not make any response in the prescribed time limit.

On March 25, 2015, the CTMO ruled that the evidence adduced by the opponent could prove that the opposed party and the opponent had a cooperative relationship, that the opposed party was aware of the opponent and of its trademark before the filing of the opposed trademark application, and that the opposed party did not deny this fact.

The CTMO ruled that the opposed trademark should not be approved for registration, and based its decision on Article 15.2 of the New Trademark Law (which describes circumstances of bad faith in a much more precise way than the Former article 15[1].

Comments:

It is interesting to note that the CTMO applied the New Law even though the opposition, filed in 2013, referred to the former version of article 15. By doing so, the CTMO indirectly clarified the apparent contradiction between the terms used in the SAIC Circular ("opposition grounds" for the CTMO and "other procedural and substantive matters" for the TRAB). It is now clear that, when deciding on oppositions filed before the entry into force of the New Trademark Law, the CTMO and the TRAB should follow the same principle: the Former Law governs the right to oppose (qualification) and the New Law governs the substantial grounds on which the opposition is based.

In this case, the opposition aimed to prove the bad faith of the applicant. At the time, it was necessary to cite the Former Article 15 (which only provides for the "agent" relationship) and its subsequent interpretation by the Supreme People's Court, (which extended the "agent" concept to the "distributor"). The Opponent further extended this concept to include any person who is affiliated to the distributor. The main point was to prove that the applicant, because of this chain of contractual relationships, was fully aware of the existence of the opponent and of its trademark and filed the application in bad faith.

The CTMO by referring to the New Law and paying due attention to all the evidence proving this "chain of contractual relationship", made a decision which could serve as a very good precedent of future cases of the same kind.

To view all formatting for this article (eg, tables, footnotes), please access the original here.

Compare jurisdictions: Arbitration

”Lexology is a useful and informative tool. I keep copies of relevant articles and often forward them to colleagues. Although I do not know all of the authors/firms, by reading their articles I do gain an understanding of their appreciation of a topic, and should the need arise I would not hesitate to contact them on those topics.”